Bulgaria FinMin Reiterates ECOFIN Convergence Program Approval

Politics » BULGARIA IN EU | April 20, 2010, Tuesday // 19:46
Bulgaria Finance Ministry Firm on Convergence Program Approval by ECOFIN: Bulgaria FinMin Reiterates ECOFIN Convergence Program Approval The building of Bulgaria's Finance Ministry in downtown Sofia. Photo by BGNES

Bulgaria's Finance Ministry distributed to the media Tuesday a press release aiming at clarifying controversial reports by the EC and the country's Finance Minister about the Convergence Program.

On Friday, Finance Minister, Simeon Djankov, announced that during the informal meeting of EU finance ministers (ECOFIN) in the Spanish capital Madrid, the EC had evaluated the Convergence Program submitted by the Bulgarian government under the Stability and Growth Pact as “adequate.”

On Tuesday, however, Amadeu Altafaj, spokesperson of Commissioner for Economic and Monetary Affairs, Ollie Rehn, said the European Commission had not reevaluated its assessment of the Bulgarian cabinet's Convergence Program.

In the statement, issued in the aftermath of the news about Altafaj, the Finance Ministry, points out that as early as March, the EC prepared and presented a technical evaluation of the Convergence Program, on whose base it proposed to the Sub-Committee on EU Government Bills and Bonds Markets – the Economic and Finance Committee (EFC), and to ECOFIN a project for the position of the Council on Bulgaria's Convergence Program.

Meanwhile, in the beginning of March, in the course of preparing interim assessments for 2009 and preliminary ones for 2010, the problem with unforeseen State obligations over hidden contracts' annexes and addendum came up. For this reason, in the beginning of April, the cabinet corrected the Program to reflect the change in the budget deficit from 1.9% of the Gross Domestic Product (GDP) to 3.7% of GDP, the Finance Ministry statement explains.

In order to adhere to the process of transparency and openness of communication between Bulgaria, the EU Member States, and the EC, the government immediately notified the Commission and the EFC about the latest budget deficit fiscal data developments and the anti-crisis measures the cabinet is committed to apply in 2010, aiming at accelerating fiscal consolidation and reducing the budget deficit, according to the Maastricht Agreement on Economic and Monetary Union

Upon presentation of actual information, and under the EC proposal, the EFC members approved a revised project for the official position of the Council on Bulgaria's Convergence Program, which accentuates on the risks, faced by the Program's fiscal goals when taking into account the change in the situation and the corrected values for Bulgaria's 2009 and 2010 budget deficit.

The revised project received political approval at the informal ECOFIN meeting in Madrid, and, as announced by the Finance Ministry, the Convergence Program will be approved this week. However, in order to adhere to the legal requirements and procedures of the EC, and to become a normative document, the project must be approved, without discussion by a formal ECOFIN meeting.

As a coincidence, the next such meeting after Madrid, is the one of the Council of Justice and Home Affairs, whose agenda includes an approval without discussion of the Convergence and Stabilization Programs of Member States, including Bulgaria.

In addition to the above statement, the Finance Ministry has attached the official program of the Madrid ECOFIN meeting.

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Tags: EC, European Commission, finance minister, Simeon Djankov, Convergence Program, Eurozone, ERM II

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